This story originally aired Dateline NBC on April 13, 2008. Hidden camera dialogue is in italics.

America's seniors have always been a sales target -- now more than ever, because they control more than $15 trillion.

In an effort to get a slice of that pie, some independent insurance agents, representing big insurance companies, are selling a relatively new kind of investment to people like Leo Stulen.

Leo Stulen: Here, you know, they're selling something to somebody who's got one foot in the grave and the other one on a banana peel.

When he was 72 years old, Leo bought something called an "equity indexed annuity." It's a legitimate investment for some people, and sales have soared because insurance companies market them as a safe place to put your money.

What are they? They're called "indexed" because they're tied, in part, to the stock market. If stocks go up, you gain some.

But the best part is if stocks go down, the insurance company guarantees you won't lose.

And they're called "annuities" because they're really insurance contracts. You pay a premium and the insurance company promises to make payments to you in the future.

But there are two important things Leo Stulen says he wasn't told, things that some experts say make this a horrible investment for many seniors.

First, the annuity would lock up most of his money for more than a decade, which is longer than he might live.

And, what's worse, if he needed to withdraw his cash early, he would pay stiff surrender penalties.

And that's exactly what happened when his wife had a medical emergency.

Leo Stulen: They say, “Well, if you draw it out early it's a substantial penalty.” And I say, “Oh.” We got took.

At the time, Leo Stulen had about $40,000 in the annuity -- his entire life savings. And because of the surrender penalty, he lost 15 percent of it, or $6,000. He got back less money than he put in.

He says the loss forced him to sell his home.

Leo Stulen: There's times where -- what are we going to buy? Pills or food? Because we were short of money.

He's not the only senior who's heard the pitch.

Dateline is about to show how some insurance agents can take advantage of you.

Join us in a ground-breaking hidden-camera investigation, as we go behind the scenes to uncover the techniques they use: inside sales meetings -- where we catch the questionable pitches; inside training sessions -- where we discover agents being taught to scare seniors; and, finally, inside senior's homes to reveal the tricks some agents use to puff their credentials to make a sale.

They're so greedy to get that almighty dollar because they're going to make a big commission that they'll do anything to get it.

For Leo, it all began at a free seminar that offers tips on how to protect your retirement nest egg. Some seminars provide useful information, but authorities say that too often, instead of simply calling themselves "insurance salesmen," the people giving them cloak themselves in fancy titles. Some even claim to have written books or magazine articles.

(Hidden camera)

"The cover story is an interview with Randy."

Joe Borg: The idea is nothing more than trying to convince the public that you're something you're not.

Chris Hansen: Financial advisor.

Joe Borg: Senior wealth advisor, I’ve seen them all.

Joe Borg is one of the experts who testified at a recent senate hearing on questionable sales to seniors. Borg is Director of the Alabama Securities Commission and part of a multi-state task force investigating the possibility of fraud in the sale of retirement investments to seniors.

Dateline is about to take our hidden cameras inside some of those the seminars -- and we'll be asking Joe Borg to help evaluate the sales pitches.

Inside the sales pitch
It's a Thursday night at the local steakhouse in Moulton, Ala.

(Hidden camera)

Jim Rieger: Hey, how you doing?

Dateline NBC: Hello, how are you?

Jim Rieger: James Rieger …

This insurance salesman has invited retirees and people approaching retirement to an informational seminar.

And as bait, Jim Rieger is offering everyone who attends a free steak dinner.

(Hidden camera)

Waitress: And what side would you like? We have fries, baked potato, onion rings, rice, or veggies?

Rieger: There's another type called an equity-indexed annuity. It's that ratchet annuity concept.

Jim Rieger says he has a way to make your money go up, up, up. It's called an indexed annuity.

Remember, that's the same kind of annuity Leo Stulen bought back in Minnesota. They're sold by insurance companies, and linked to the stock market.

And unless you pay stiff surrender penalties, they tie up most of your money for years.

That's why Jim Rieger warns: you don't want to put too much money in what he calls "ratchet" annuities.

Jim Rieger: You all know how ratchets work, right? They only go one way, don't they?

Finally: the clincherYou can't lose a dime.

Jim Rieger: As the market grows in this kind of annuity, your account grows, all right? If the market goes down ... Aren't your funds insured? Well, they are. So if the market collapses, your account never goes down ...

That's true, if you keep your money invested for the length of the annuity, which invariably means years.

But Joe Borg says people can lose big if you have to take your money out early.

Joe Borg: They would pay the surrender charges, which could be 10, 15, 18 percent. And basically they would come out with less than they put in.

Rickey Gibbs doesn't know yet that I’m a reporter, or that he's being recorded on hidden cameras.

I just act like I’m Leon’s friend, and want him to make a wise investment.

Chris Hansen: Now, let's say there was something catastrophic and he had to get his hands on some of that money. What kind of penalties would be incurred?

Rickey Gibbs: What I was telling him is we don't want to put too much in it.

Although he warns against tying up too much money in an annuity, remarkably, Rickey Gibbs avoids telling us how big the penalties are.

And changes the subject again.

Chris Hansen: So, what you're saying is don't worry about the penalties on taking money out of the annuity.

Rickey Gibbs: Right.

Chris Hansen: Just buy yourself a couple more policies.

Rickey Gibbs: The factor in enough to take care of--

Chris Hansen: Get more insurance-- Basically is what you're saying.

Rickey Gibbs: Yeah.

I have to ask three times –-

Chris Hansen: I know I’m sounding like a broken record

-- before I finally get a straight answer about the big penalties.

Chris Hansen: Well, here's a question. It's Rickey, right?

Rickey Gibbs: Right.

Chris Hansen: Why not just be up front and straight with people from the get go and say, "Look, if you got to touch the money, it could cost as much as 16 percent or more?" Why not just tell them? I mean, why not?

Rickey Gibbs: I--

Chris Hansen: If it's such a great product, then why not tell them. That's not what you said up front.

Rickey Gibbs: I say that you're a liar because you didn't tell me what you were doing and who you are.

He's upset we didn't tell him we were from Dateline when we first invited him to the house.

Rickey Gibbs: I think that's crazy. I guess we're done.

Chris Hansen: OK.

Rickey Gibbs: We'll see you.

Chris Hansen: Thank you for your time.

Rickey Gibbs: Thank you for being such an a--hole.

Chris Hansen: That's nice talk…

We've seen some of the tactics insurance agents use to sell to seniors. The agents seem awfully slick. How did they get so good?

You are about to witness something few people have ever seen -- a school where, authorities say, insurance salesmen are being taught questionable tools of the trade.

These training sessions are only open to licensed insurance agents.

We don't know whether the salesmen we've met so far studied here, but the state of Alabama agreed to help us investigate by issuing insurance licenses to two Dateline producers, so we could attend -- and bring along our hidden cameras.

(hidden camera)

Tyrone Clark: Annuities are not liquid? That is baloney …

This is the man in charge of "Annuity University" -- Tyrone Clark, the self-proclaimed king of annuity sales.

Annuities are legitimate investments for some people, and Clark is a strong advocate for them.

Apparently, agents like the idea of pretending to be authors, because Dateline found copies of the same "Alligator" book supposedly co-written by Jeffrey D. Lazarus, Steven Delott, and Ronald and Robert Russell.

Want to sound like a respected financial expert on a nationally syndicated radio show?

At Annuity University, you can buy that too.

(hidden camera)

Jeff Hoyle: Response radio is a pre-scripted radio show, for lack of a better word.

This trainer is explaining how, for a price, an insurance agent can pretend to be a guest on the radio.

They'll send you the script, already written.

Then, the radio host will call and record you.

Dateline: And Rick would interview us?

Jeff Hoyle: Yes.

Dateline: On the show?

Jeff Hoyle: Yes. Yes. You are like the interview-- you are like the guest speaker on "Senior Concerns" talk show.

And, before long, you'll be armed with CDs of your guest appearance to help impress customers.

Tyrone Clark says it's all part of the formula for selling annuities.

But Attorney General Swanson says tactics like that can lead to abuse.

Lori Swanson: He is basically handing them loaded guns so they can walk into the senior's home and rip them off.

Bill Denny testimonial: They have helped me to be a tremendous success in the fixed annuities business.

Now, Denny and his assistant are sitting down in a house in Arizona we've wired with hidden cameras -- and he's about to give his pitch to my own aunt Alice.

(hidden camera)

Bill Denny: Everything I do must benefit you.

Aunt Alice has volunteered to help me find out if insurance agents will level with a widow in her 70's when they try to sell so-called equity-indexed annuities.

Bill Denny: All I really do anymore are called EIAs. That stands for equity indexed annuity.

Remember, even though they're pitched as "can't lose" investments, experts like Alabama Securities Director Joe Borg say there are important reasons seniors should think twice before putting their money in indexed annuities.

Borg: You're locking in your money. You can't get it out exactly when you want it. There's high surrender fees if you need it.

But the key test is: will Bill Denny be honest and make sure my aunt Alice understands the size of those surrender penalties?

Alice Grace: God forbid if my grandson was in a terrible accident and they couldn't cover all the expenses or something, you know what I mean? I'd want to be able to help out on something like that?

Aunt Alice is asking about taking her money out in an emergency.

It's a simple question really.

And it has a simple answer. He could say: "Yes ma'am, it's costly to take money out early. You'd lose a bundle."

But instead of saying that, Bill Denny gives an answer that's muddled with information about taxes and IRAs.

See if this is clear to you.

(Hidden camera)

Bill Denny: Well, the thing is, of course, if you pull a big lump sum out you're going to have a big tax bill anyway.

Alice Grace: Oh.

Bill Denny: You know, it's all taxable. That's-- you never paid taxes on IRA money. But there's a depreciating surrender period right here, because you're under 80. But it goes for 16 years. It starts at 20 and ends up at zero.

Did you catch it?

The information is in there. The annuity he's pushing has a 20-percent surrender penalty.

Bill Denny: Well, she can-- she could end up losing. Well, here, let's look at the surrender charge...

Bill Denny just admitted Alice could lose money.

And he's pulling out the same table he glossed over the day before.

Bill Denny: That's because she did it in the first year, there's would be 20 percent the first year.

Chris Hansen: OK. So that's what I’m getting at. So she needed to get at this cash, right? She would face in the first year a 20 percent--

Bill Denny: Well, if she ever took it out before the anniversary, that would be crazy.

Chris Hansen: But I still need to ask you, when Alice was talking to you yesterday, every time she'd ask about what she had to go through if she needed to get her hands on that money, you sort of didn't get right to that 20 percent surrender penalty.

Bill Denny: Well, I said this is why I left this with her. I said “Look through here.”

Leaving the brochure, he says, is good enough.

Alabama's Joe Borg doesn't see it that way.

Chris Hansen: Isn't it up to the person buying these products, even if they are elderly, to read all the fine print, if in fact they're going to invest, potentially, their life savings?

Joe Borg: I don't think I’ve ever met anybody who's even read the loan documents on their loan for their houses, let alone the person you trust sitting across the table who has told you, "Trust me. I'm here working for you. I'm a senior financial advisor. Trust me. Sign here."

But when it comes time to tell bill Denny who I really am, it's my turn to be surprised.

In fact, you may be surprised to hear that Bill Denny thinks it's a good idea.

Chris Hansen: And you understand why we'd be doing a story about this?

Bill Denny: Absolutely. Absolutely. And actually, I actually have to be honest with you and agree with what you're doing because I don't want bad apples out there doing things the wrong way.

Bill Denny warns us that there are plenty of bad apples, but he's not one of them.

Bill Denny: Well, I believe this was totally upfront and truthful. I didn't mislead her in any way.

Bill Denny says he's never had a customer complaint in 15 years of doing business.

And, ever the salesman, he shows just how determined he is to make a sale.

Bill Denny: So are we going to move the money?

Chris Hansen: Not just today.

Later, his lawyer told us that because we limited the time he could spend with Aunt Alice, Denny tried to pack his normal 3-hour sales pitch into 45 minutes.

If he'd had more time, Denny says, he would have given a full explanation of annuities - including those surrender penalties.

There is a phone call to the insurance giant Allianz, complaining about Robert Bradford.

Records show there are more than a dozen law suits pending against Bradford, all accusing him of misleading people when he sells so-called "equity indexed annuities" -- a type of investment that locks up most of your money for years.

All you have to do is go online to a special Web site, pay "Financial Playbook" several thousand dollars, pick a ghost-written article (I chose number #42, about annuities), and send in a picture (I used an old one of myself).

And before long, there I am on the cover of the new issue as a "Senior Advisor."

We showed what we discovered to Minnesota attorney general Swanson.

Lori Swanson: Boy, that-- this is part of the marketing ploy. Build trust, show you're reputable.

Chris Hansen: Then we found that for $1,500, we could get the magazine with my picture on the cover.

Lori Swanson: That's terrible. And you've captured it on tape, absolutely what we're hearing in all of these cases and investigations that we're bringing -- that these agents are not telling the truth.

When Bob Bradford returns to talk to Leon and try to close the sale, I decide to step in.

I haven't told Bradford I’m a reporter, yet, but he may be on to us because, suddenly, I’m getting answers our senior volunteer never heard.

Remember how he made those surrender penalties sound small, like CDs? Not anymore.

Chris Hansen: I found that magazine, that very same magazine, with a different agent's face on it.

Robert Bradford: Yeah, yeah.

At first, Bob Bradford acts like there's nothing wrong.

Chris Hansen: Now the reality is this, Bob. I looked around and I checked. And I contacted this outfit, and for $1,500, they put me on the cover.

Robert Bradford: All right.

Chris Hansen: What did you pay to have your picture on--

Robert Bradford: Oh, I don't remember.

Chris Hansen: You don't remember?

Robert Bradford: Oh no.

Chris Hansen: But you didn't write that article, did you?

Robert Bradford: No.

It's time to tell Bob Bradford he's been caught in the act by Dateline's hidden cameras.

Chris Hansen: I’m Chris Hansen, with Dateline NBC.

Robert Bradford: Oh, OK.

Chris Hansen: And we're doing a story on questionable practices of insurance salesmen who sell financial products to the elderly. And if there's anything else you'd like to tell us about your dealings with Leon or with anybody else, we'd certainly like to hear it.

Bradford: No. You don't put money in these things and turn around and take them out.

Bob Bradford denies he did anything wrong. And Financial Playbook told us they didn't know agents were using the magazine to puff up their credentials.

Bradford says he wasn't trying to mislead anyone, that he gives a full explanation of surrender penalties before he completes a sale, and he blames those lawsuits on plaintiff's lawyers advertising for clients.

But remember that complaint call about him to Allianz, the nation's biggest seller of indexed annuities?

In spite of customer complaints like that and a growing number of lawsuits alleging fraud, Allianz was one of the companies Bob Bradford was still selling for when he came to visit us.

Bradford: Mostly we're using a company out of Minneapolis called Allianz …

Last year, Attorney General Swanson sued Allianz and several other insurance companies, claiming they "failed to properly supervise" agents and encouraged deceptive and misleading sales practices.

Dateline wires the home of a volunteer, Jenny, from top to bottom with hidden cameras. Then she called repairmen to her house for a simple problem we created as a test with Jenny's pool. NBC's Chris Hansen reports.